A company wanted to raise $100, 000 and issued twenty, $5000 bonds paying a 10% coupon rate
Fantastic news! We've Found the answer you've been seeking!
Question:
A company wanted to raise $100, 000 and issued twenty, $5000 bonds paying a 10% coupon rate payable semi-annually for 5 years. It set up a sinking fund to repay the debt at the end of 5 years and made deposits at the end of every six months into the fund. The sinking fund was earning 6.5% compounded semi-annually.
(a) calculate the periodic cost of the debt
(b) calculate the book value of the debt after 3 years
(c) construct a partial sinking fund schedule showing details of the first two and last two payments and the totals of the schedule
Related Book For
Finite Mathematics and Its Applications
ISBN: 978-0134768632
12th edition
Authors: Larry J. Goldstein, David I. Schneider, Martha J. Siegel, Steven Hair
Posted Date: